Beyond Heathrow – what the UK Airports Commission missed out

After almost three years of work involving around £20m, the UK Airports Commission chaired by economist Sir Howard Davies published its final report. After the evaluation, the commission made a “clear and unanimous” conclusion that a third runway at Heathrow should be built to increase UK airport capacity.

It was one of three options that had been shortlisted in the commission’s 2013 interim report:

A new second runway at Gatwick

The extension of Heathrow’s northern runway to at least 6,000m – enabling the extended runway to operate as two independent runways

A third new 3,500m runway to the northwest of the current northern runway at Heathrow.

All three were considered “credible options for expansion, capable of delivering valuable enhancements to the UK’s aviation capacity and connectivity”. Indeed, each of these options had different pros and cons from an economic, environmental and connectivity point of view. But Heathrow won the commission’s appraisal with the promise that it would add £147 billion in economic growth and 70,000 jobs by 2050.

The report highlighted the economic and strategic benefits of a new runway at Heathrow, which have been discussed here. And, in many ways, the decision is not surprising. The question that the government actually asked the Airports Commission was to identify the option “for maintaining the UK’s status as an international hub for aviation”. Some may argue that this is a leading question, since currently the only existing hub in the UK is the one at Heathrow. So, in many ways, Heathrow was the only possible answer.

The areas that the report did not really engage in – beyond immediate economic considerations – will give ammunition to the politicians readying themselves to fight the recommendation.

Congestion and lack of capacity at Heathrow has forced airlines to increase their focus on long-haul routes and bigger aircraft and reduce flights to UK regions. As a result, three quarters of the connecting traffic from UK regions to Asia-Pacific and the BRIC countries depend on hubs outside of the UK. Adding another runway at Heathrow would open the door to more flights from the rest of the UK, but this effect might only be temporary until the capacity limit is reached again. Also, airport charges might increase as a result of the investment, which could be a disincentive for regional services.

To ensure that the benefits of expansion are felt throughout the UK, the commission suggests ring-fencing slots for certain regional routes using Public Service Obligations (PSOs). This is an EU provision allowing governments to give a carrier a subsidised monopoly on a route that is not commercially viable.

In order to deploy more PSOs, the commission suggests the government interpret the PSO regime more widely than at present. Currently, the government only considers the subsidy of an air service to the capital if it is the last remaining route from a region into any of London’s six airports. However, some EU Member States, like France, interpret the PSO provision on an airport-to-airport basis, which would give room for more PSO routes.

As with many of the recommendations, there are no guarantees that this would happen, especially in a context of decreasing public expenditure. Hence, this does not seem to be a solution guaranteeing the future long-term connectivity of UK regions via Heathrow.

Limits of growth and resilience

The focus of the report was on capacity and connectivity, but it failed to take into consideration debates that there have been on the limits to growth. Certainly, the atomization of air traffic increases operating costs – but there could be a limit to the idea of economies of scale.

Some larger airports can operate under decreasing returns to scale – once they are passed a certain size, the benefits and efficiency that comes from being bigger ceases. Plus, the concept of airport capacity (the number of planes an airport can service) should probably be substituted by the idea of environmental capacity, which takes into account the noise pollution airports cause and the impact they have on the communities around them.

This is why the report recommends a package of mitigation measures and conditions for the expansion. Suggestions to establish a legally binding “noise envelope”, a ban on night flights, have predictable respite periods and community engagement are indeed important measures that try to build trust between the airport and the community. Nevertheless, the conflict will be recurrent as flights over residential areas is intrinsically incompatible. The most cost-effective tool against noise annoyance is still land use planning.

Another factor that the report’s finding does not account for is the robustness of the wider air transport network when challenged by external events (such as poor weather, strikes or terrorist attacks). A single airport closure may affect the network’s overall performance. So, the debate is not only about what airport can deliver more connectivity, but what airport is more critical in terms of the delay imposed to the disrupted passengers when there is a scenario of closures.

Hence, although the commission went through protracted discussions that considered economic, social and environmental factors, in reality the debate has been centred on the economic and connectivity output perspective. It has lacked discussion on the relationship between the airport, London and the rest of the UK, and more effort could have been devoted to the analysis of system-wide resilience and robustness of the UK air transport network.